Brightcom Group Limited (532368) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. I'm Kritika, moderator for the conference call. Welcome to Brightcom Group Limited Investor Conference Call. The duration of the call will be for one hour. We have with us today Mr. Suresh Reddy and Mr. Y. Srinivasa Rao. [Operator Instructions] Please note, this conference is recorded. Before we go ahead with the conference, Brightcom Group would like to mention that during the conference call, certain statements in this call, reflecting Brightcom's future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause results to differ materially from those in such forward-looking statements. The company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the company. Now I hand over the floor to Mr. YSR, who will update us on the financial aspect of the call. Thank you, and over to you, sir.

Good morning, ma'am. Good morning, ladies and gentlemen. It is a pleasure to speak to you all again. I will briefly give the summary of financial results of Q3 of financial year '21-'22. Our revenue for Q3 of financial year '21-'22 was INR 2,021 crore, registering a growth of 130% year-on-year and 33.13% on a quarter-on-quarter. The EBITDA for quarter 3 of financial year '21-'22 was INR 568.87 crore, registering a growth of 62.77% quarter-on-quarter and 126.84% year-on-year. The PAT for Q3 of financial year '21-'22 as INR 371.44 crores, registering a growth of 157.99% on year-on-year and 75.09% quarter-on-quarter. When we come to the revenue from Digital Marketing segment, the revenue for Q3 of financial year '21-'22 was INR 1,928.944 crores, registering a growth of 90% on quarter-on-quarter and 142.23% on year-on-year. When it comes to the profit before tax, from Digital Marketing, it showed a growth of 74.69% quarter-on-quarter and 168.4% year-on-year. In absolute terms, the amount was INR 505 crore. Revenues from Software segment for Q3 of financial year '21-'22 was INR 92.89 crores. This is briefly the operating results of the company for the quarter ended 31st December '21. We have received some questions through mail regarding the receivables, briefly explain. As on 31 December '21, total receivables across the globe yielded INR 2,095 crore, out of which INR 1,916 crore is from Digital and INR 178 crore from the Software segment. These receivables are almost pertaining to the current quarter. In the current quarter, we included sales of INR 2,021 crores. INR 1,916 crores consists of mostly the current receivables that is pertaining to the November-December. Okay. With this brief note, I will hand over the floor to Mr. Suresh Reddy, Chairman.

Thank you, YS Rao. First of all, I'd like to welcome all the callers into the call today on a Saturday morning. Appreciate the tremendous interest and support that we've got from the stakeholders and shareholders. And just I could sense the swelling of the pride in YSR's update just now. It's heartwarming to see that we have had best quarter ever in the history of the company. So we are all very pumped-up and kicked about how things have been going. While we can easily take all the credit, part of the credit obviously goes to the market conditions and how the world has changed. With that prelude, [indiscernible] initial conversation, I would like to get into the details little more on where the company did well, what actually happened and why this run has been very good for the company. Just to give you some sense, if you look at year-on-year, one thing you have to keep in mind that the business of digital marketing and digital advertising is a cyclical one. So we have -- this is how it goes. Always the third quarter is the biggest quarter. I've said that in the past at the cost of repeating. So third quarter has always been the best quarter for the year and same is the case here. While third quarter to third quarter from last third quarter to this third quarter, it is a little more than double, little more than double the business. And over the entire year, we'll probably do, I mean maybe double or a little more than that is what our initial assumptions are. So it's a major shift. So in that sense, financial year, this financial year is a huge growth area for the company. So I'm happy to note that. So just to give you certain details here. We've already published this. We've added number of new publishers. The number is -- 43 is actually -- there was a question somebody had forwarded to us. It said, what is this 43, you have so many publishers. So we have 2 sets of publishers, ones who actually come on to our automated systems and become publishers and get access to an automated -- of course, we do check their background, do all those things. And there are others where we have full service. So this 43 new publishers are more the full service type of publishers. We will have a little more detailed presentation with some names also in it. At this point, I just want to leave it at numbers. We added -- already, we crossed 200 ad agency relationships globally. There are 12 new ad agency relationship that came on board this quarter. We added 10 new direct advertisers. So this was some of the -- just to give you some sense of things that contributed to do slightly better than guidance, these were some of the reasons. The guidance was based on [indiscernible], but these were some new things that came on board. And other things to note, in spite of all the busy schedule of third quarter, which is always the case every year, we had the time to launch a new product. We launched Brightcom Video Player, which is clearly -- very early to say much about what are the revenues and what are the profitability and things like that. But I can clearly say there's a huge traction. Every place our clients are testing it, they're finding it very useful and interesting. So we are gradually percolating into our own publisher network to start using it. Just to give you an example why this is important. Let's say you have a static page that people visit and then run some banner ads and then you have button ads and stuff like that on a regular web page. With this, you could -- let's say, it's an entertainment channel or somebody is talking about a new movie or something like that. With adding this as part of it, they've run a trailer of the movie right there and then some ads can be embedded in that. So it makes the pay, which is normally a static pay and suddenly become more dynamic and in fact it adds to the content in a different way. So this is a nice addition I believe. In terms of numbers, we'll only start to see more clarity and how this will play out, because there are some large players in the market place, whether it is a JW Player or VLC player or any -- there are some good players in the marketplace. What we are trying to leverage is our relationship and our ability to monetize that pure-play players that we actually bring in advertisement along with players. Hence, I'll stop with that. I don't want to get more technical on that, but it's an exciting new product, and we are waiting and watching how it plays out. And I have talked in past about B-local Exchange. We continue to add more newspaper relationships, I think number was 14 this quarter. Then in terms of another interesting thing, again, due to additional large publishers we added and holiday season itself and a lot more places that we are able to service. Typically, we used to do about 30 billion impressions maybe in the beginning of the year and started to go up to 60 billion, 70 billion as we came to the middle of the year. But in December, we touched 90 million impressions. I think people spend more time browsing, searching. And usually, why -- I also want to add another point. This quarter is always the best in the advertising space, not just digital. It's because in the Western world, that is when Christmas and a lot of gifting based festivals show up, whether it's Christmas, Thanksgiving, Hanukkah and such. So there's a lot of activity related to purchases. And because of the COVID and because of whatever people are more comfortable now, they don't have to walk into a store, they're able to directly browse, check-out. So some of that action is going on in December and some last-minute buys and such. So there is -- something to report back to all of you is that we touched at 90 billion, and we'll also let you know when we hit 100 billion impressions a month. And I hope to see that fairly soon. Let's see how that plays out. That is a general report in terms of the numbers. Another point that we also want to bring forth is, we added Mr. Satish Cheeti to strengthen the management team. He comes in as President and Head of new Digital Audio Division, Brightcom Audio. He is already starting to look into how the whole thing is working out and, in fact, negotiating a letter of intent for the company, which we have talked about. And so between him, we are working on this new digital audio acquisition, Lycos, and we will let you know as soon as that is signed and it's going very well. Other things coming to more on the numbers itself. I had set the target to ourselves of having a free cash flow of INR 250 crores by end of March and another INR 250 crores by end of the next quarter of June, so almost INR 500 crores of free cash flow. But there were questions on how we will use the free cash flow and are we still on track and things like that. So we're definitely on track. How will you use? We will talk about it as things unfold. Hard to tell you right now. But we have some plans, let's see how that plays out. And more importantly, it's absolutely on track towards that. And I want to give you the core reason why we are very gung-ho and we're clear that this will happen. Generally, in the industry, when you are in the 350 million, 400 million revenue range, there is a product development cost and there are other costs that go into running a tech business like ours. And mostly in the adtech business, free cash flow gets tighter because you have to do significant investments into new products. And the moment it crosses the 500 million mark, suddenly free cash flow starts to open-up, and which is why we predicted this when we made our guidance. And so already, you've seen the numbers are definitely looking like we clearly crossed 50 million mark annual revenue. So we are -- it's all -- because we know our margins, we know our fixed cost, we know our product development costs. So all that's clear. So this is where it starts to get into the zone where company starts to accumulate free cash. So that's broadly some of the points I wanted to make. Then in terms of other things that actually helped the revenue growth is, of course, like I said, the industry itself is shifting. And why is the industry having this kind of a huge growth in revenue. It's partly because just one big thing that we saw is the online sales compared to pre-pandemic period like 2019 is almost 60% up. That's phenomenal compared to ever before in a couple of years' time frame. So what is happening is now the manufacturers, the retailers, the wholesalers, all these different parts of the ecosystem have clearly started to spend more money and resources towards strengthening their online presence and having easier ways for people to evaluate and make purchases and conduct commerce. So that is a massive contributor not just to them, but to the ecosystem. So I would give that the highest driver in terms of why we are seeing this kind of growth. Of course, there are a lot of -- we have also as a company focused on trying to filter-out all these spurious traffic that comes through. And industry is reaching a stable state, and we are able to add a group of players in the industry. We are able to cut down on the traffic, the fraudulent traffic that's coming through is all getting cut out. So whatever is coming through are real people and hence, whether they respond or not, is a real person start. And since more commerce is happening online. So more is getting sold and hence, the CPM costs are getting better. So we are able to ask for better CPMs because our advertisers are getting better results. So the effective CPMs have gone up. This is broadly some of the things. Another update. Obviously, we have already made an update, which is we have signed a definitive agreement with MediaMint. And what's going on, on that front is we are waiting for -- there is a cash component and then there is a stock component. So we have applied -- we have actually got the shareholder approval, we applied to exchanges. We should get the exchange approval in a day or 2. I think it's looking like it's almost done, but we're waiting to hear from them. And once it is done, we will make that allocation of 1.4 crores shares. It's a small amount of shares, but that's the stock portion of the acquisition. And then the cash component that has come through our FPI investments and the preferential issues all has come in. So there are a few things, formalities, we have to finish. Once that is all done and we get the board approval that it's all clear and done, we will go ahead and make -- close that deal. So that's the status on the MediaMint acquisition. Other point, the general update. We've already updated you that we are one of the select group who was selected as multichannel partners for Google, MCM Partners, as it is said. So that is also adding -- in fact, that is another huge driver where we got lot of new publishers, new quality -- higher-quality traffic flowing through our network. Other than that, a couple of things that I wanted to update is our team was at the Digiday Publishing Strategies Conference, met a lot of publishers. And again, that is an ongoing journey where we keep adding publishers on one side and adding advertisers on other side and we enhance the network. And then in terms of education, our Director of Inventory Quality, Joel, had a nice webinar. I think we published that on Twitter and a very good response we got from that. And I'm happy to report that it's got great feedback and the customer -- credibility with the customer, that has been really good. Beyond that, of course, now there is a concept called prebid, which is considered like a single unifying solution for all publishers and supply-side platform. It's an industry initiative, and we are a very major part kind of player, partner in that and we are proud to be a prebid member. So that's something I'd like to report to you. Beyond that, general outlook for the industry itself, like I said, there's a huge shift and this is going to continue. The sector itself -- the outlook for the sector itself is very robust. And other things that I had mentioned last time, interesting developments have happened since about Metaverse and how things are changing, the landscape, especially from the social and the AR/VR merger perspective. You must have read about Microsoft by making one of their largest acquisitions in -- it is the largest. They paid about $69 billion to make an acquisition in a gaming company that's -- fundamental core there behind that acquisition is this Metaverse and people participating together on a digital platform. So we are watching this closely, and hopefully, we'll have a better update on that. And we would like to be part of that ecosystem advertising. And in fact, there is lot of real estate. There's a recent article on this real estate being bought and sold on Metaverse as well. So it's very interesting stuff that is happening there. So this is broadly what my update is for today, and I'm happy to take -- let me go through this -- before I go, there are already some questions that came through. I'll try and answer them so that I've addressed most of the questions. I'll just walk through that, give me a second. There is a question regarding typical contract period we have with publishers. How many and how much percentage of the publishers have signed up for next year. So usually, it's a one-year contract and automatic renewal. All of them have signed contracts for one year, and then they keep getting automatically renewed unless -- we have 2 types of contracts, basically insertion order and purchase order. So both are on 2 sides of the equation that we work with. One is with publishers, other is with advertisers and we basically discuss on how much traffic and how much will we pay our debt paid for the traffic flowing through and nature of targeting that would go into it. These are some of the companies of this contract. I hope I've answered the question on that. And then coming to the number of publishers added this quarter, I think I talked about that. Brightcom player, I did talk -- I think I covered all of that there. Cash flows, what is the percentage of profit to FCF ratio can we expect in coming quarters? I'm doing a presentation that I will put out over the next week or so. We will have some of those as part of that. So I don't have it top of my head. We'll put that out in that presentation. Then you were talking about -- and the question is regarding accounting policy being reviewed, similar in line with large global companies. Yes, that review is very much in line. We were planning to implement some of that this quarter. But again, we were just ensuring that all global practices are taken into account and such. So we will have an update on that in the next month or so. So we're having some specialists review some of the policies that we think should be. And that should come up, so. And talking about auditor, yes, we have our auditor, who is India based. And we do have local auditors in various countries. And like we have mentioned in the past, big 4 auditors, we have in Israel. Other places are fairly large auditors. Big 4 is almost 40% to 50% of our business goes through the big 4 auditor in the trade. Coming to EBITDA margin. The question is it's been around 31% to 28% in December quarter. Can we expect these margins to remain? Yes, very much they will remain. Definitely, we've always been -- yes, they've fluctuated over the years depending on speed of execution, flow of business, a lot of things matter. And when there is a frenzy of business, sometimes we do compromise a bit about a couple of percentage here and there to make sure that we get the market share. So I don't see that dropping. I see that getting enhanced as we go because the fixed costs start to also top-off. So I'm expecting that to stay at this level, a slightly healthier. On the MediaMint acquisition, they have bunch of questions. How do you plan to integrate this company, I think, is the question. Basically, we believe in retaining the brand. We believe in having the brand, get all the business that's getting. We are only more a facilitator. So MediaMint will be a Brightcom brand, for sure. Will it operate as a separate subsidiary or part of the India unit? Good question. First 6 months, it will operate as legally a separate entity, after which we will review and see how things will take. But in terms of brand and the business division, it will continue to operate separately. Will it get consolidated, will it become part of the standalone. That is what we are looking at. So that's what will happen maybe after 6 months. Then status of the audio ad tech company, I think I've talked about it. Then future, yes, this is another interesting question. Ad tech is projected to grow at greater than 20% CAGR for the next 5 years. I think it will be even greater. But that said, would you expect BCG to grow above these numbers? Of course. So that's the play, right? You have to be more efficient. That's when you start moving into the leadership position. So it's very important for us to have -- which is why I keep emphasizing on free cash flow and ROE that we would like to monitor to basically improve and take more business and have more efficient business running. So which is all going to help get a larger piece of that part. So definitely, we can expect better growth than that. Then there is -- yes, do you see any impact of the post-pandemic Fed rate hike. That's more of a question to an economist. But that said, I don't see much -- we are not seeing much. I can say that when we talk to our clients, not much of an issue they're saying, Oh, wow, it's going to reduce our spending or anything of that nature. Whatever you are seeing is cyclical because there's been a lot of spending during the October to December quarter. There's a little cooling period in this quarter. And then it goes out. So it's the same thing that goes on year-on-year. So it's nothing to do with this. But definitely, we are watching how it's impacting. That's basically all I can say. In terms of strategy, yes, AI/ML, what is the plan and IoT, what is the plan? These are being worked upon, still in terms of strategically getting involved and making things happen, make it to the next level, you can expect third quarter, second to third quarter of next financial year. So we will start making moves in that direction, start trying to grow that more. Till that it's organic and it has been -- it has not been bad. It has not been phenomenal because it didn't catch on fire on its own. Does require intervention from a strategic direction, so which is what we will look at, at that point. Then comes our updates on partnerships with Amazon, Meta, LinkedIn. We continue to have the relationships with large players like Facebook, Meta, LinkedIn, Amazon, it's ongoing, and we are always trying to see which direction the client is trying to head, and we will always try to make sure that we are there to service them and to help them. There's a question about MediaMint working in AR/VR-related projects and how that would blend into Metaverse. Yes, we will take that definitely into account. That's something that we have been discussing. Then yes, there's gaming companies like Nazara, has entered adtech space. Do we see any possibility of BCG entering into gaming space, either as an active player or as a gaming publisher? Definitely, not as a gaming publisher. Just to jog your memory back, the Lycos brand we used to have, one of the largest gaming brands, we have actually moved on and we don't believe that. It's like in my mind making a game is like making a movie and it's a content game. We are more a platform company and a tech company and a company that's focused on performance, which are measurable. Content is a difficult different ball game, which is not our strength. So we will never get into making game or becoming game publisher. We will work with existing gaming publishers and definitely help them monetize better than they can do on their own. So that is clear on that front. Then there's a question, do you plan to do a start-up fund through this company? We don't have any such plans at this point. We will -- we see opportunity to grow the business of Brightcom. We'll make investments there. But in all, our acquisitions have been 100%. We did do a few 49%-type of. So it will be -- it won't be like a VC funding approach ever. So that is not going. Other questions regarding industry. I think there is -- how is third-party -- first-party cookies versus third-party cookies being phased out? And what are we doing? Yes. We have partners here, and we do see that the first-party cookie and having partnerships with the right people is going to help us put in a better play in terms of the business itself. Then -- there's a question about how OTT platforms like Netflix, Disney and others may start advertising on their platforms? We hope they will. So that will work in our favor. That's all I can say on that. Then, yes, question regarding some specific -- I guess I'll leave that for now. So that's all I had. I will open up for questions and then take it from there.

[Operator Instructions] First question comes from Patrick from Connectivity Solutions.

Awesome performance in Q3, and I would like to thank the entire Brightcom. We have definitely set the bar high, and our expectations also have gone up with that. I have 2 questions. Question number one is, what are our plans to sustain and consistently achieve such growth rate and increase cash flow further? And related to this question is, given our dilution level, how do we balance our performance metrics of EPS, ROE, PEGR, et cetera? I have a second question, I'll come to that later.

Yes. And let me come -- thanks again for the compliments. Coming to the -- what are the plans to sustain the business at this level and how to actually grow at the same level? Yes, this quarter has been abnormally high. So, obviously, don't expect me to repeat this quarter again to do that kind of growth rate on a quarter-on-quarter basis. But I can tell you a few things, and that is where, in my outlook part I talked about it. The -- I don't have to do a whole lot other than stay efficient and stay centered on where we are good at because the adoption of digital and people moving over and making digital as their choice is the way of buying things is just happening at a very rapid rate. And there are so many people still gradually moving to their mobile phones or to their laptop, tablets and starting to see this as an option. Few things that are really catching fire is, social commerce, for example, other area that has come to our notice, we're looking at how that's catching on, especially in China, it has been very rapid. So you can see how your friends are buying, and then you can actually follow up those people and get ideas on how to buy active. That is a very interesting way to make people participate in buying. So there's a lot of things like that are happening. And so these are all smart industry ideas that are working. And given this quick spike or catalyst that has happened called COVID-19, while it has had all the difficulties, this is one positive effect that it had. It is not going back. This size, this kind of traffic across the different players in the industry have come to stay. So I'm not concerned that, "Oh man, this is not going to sustain or it's going to go on at all." And if you look at future, we expect the growth rates like somebody mentioned in one of the questions is to maintain at least a 20% or more year-on-year as an industry, and we would work on, first of all, through acquisitions through cash that comes in and through other means to actually inorganically add so that we become a larger significant player in the ecosystem. So that is our endeavor. So there, the revenues are not just organic growth, that is inorganic growth. So to sustain that, we have taken the first step of bringing in MediaMint so that we have the back-end and we have the basic skeleton to add on the muscle to it. That is where our mind is right now. So we are very, very gung ho about the future. And I hope that answers your question, Patrick, on the first question.

Yes, if you can hear me, the second question was, in fact, related to the points that you are making. So maybe I'm just putting that question and will help you to answer the first, as well as second. And the second one was basically our acquisitions like MediaMint or maybe the futuristic acquisition of all your technology companies, how will we be able to create cross leverage and accelerators on our core business by acquiring these companies? And hence, as a part of this entire strategy and vision strategy, what can be our company's vision for the next 3 to 5 years in terms of what we mean to customers? Or even what will be our size maybe 5 years down the line? Is there any thought process or vision around that?

Yes, yes. Very much. What we mean to our customers and how are we positioned, that's a different subject, I'll come to that. Your -- I'll answer your question directly. So the first point of -- if we continue to buy companies and add revenue and not grow organically, what you're saying is right. So we are looking at something that will bring synergy that will complete our offering to our existing clients. So the clients are happier. They don't have to go to 2, 3, 4 places to get what they want. They can go to one place and we provide the full solution. So now the endeavor is to give them a more comprehensive full solution. Today, we are seeing, as a digital agency, digital marketing group, whatever you want to call that, who is focused on ensuring the global traffic of U.S. companies are easily monetized. And so, that is our strength, that is our strength as we are seeing today. So that is how we have built, that is the positioning that has brought us the revenues from the business so far. So we want to move from there, gradually go more, not just the global part, but become a significant player in terms of monetization, not just out of U.S., but including U.S. as well, having a comprehensive solution. So that is the positioning there and how we plan to go in there. Now in terms of what will happen to our EPS and what will happen to our promoter holding and dilution and things of that nature? See, to me, EPS is always directly proportionate, it's a number. EPS is proportional to number of shares. And so what is more important is [ price ] to value of the company, right, to the capital, market cap or whatever you call it, that is the same ratio. That is more important. Now whether you break it up into -- so the multiple, which is the PE, it comes from market believing that we are a credible player and somebody who's got potential to become a large global force. That is the key. So, whether I have 10 shares or 100 shares, is relevant. It is more important. Am I getting the right multiple, that if I hold 1 share at INR 100 or 1 share at INR 200, it doesn't matter as long as it's proportionate, right, as long as I'm getting the right multiple on the company. So that is how I see. It is a mathematical point. Now the third point is, how do we finance? We have worked out some very creative ways, and we will talk more about it without doing too much dilution, how we can actually build the business, how we can actually finance our acquisitions and be able to -- with the additional cash flows, not impact the -- not impact further dilution in the company? I have mentioned that in the past. Another tool we are also looking at is diluting -- because all our subsidiaries we own today are 100% held by the parent. So we're looking at one option there is not to dilute with the parent, maybe do some dilution at the next layer. So these are some of the strategies that we are adopting, and we will play it by the year, make sure that we get the right value. And it will be based on how the deals will fall in place. I know it's a long answer to a short question. I can further go deeper if you want, Patrick.

No. At this stage, I think I'm fine with the answer. The question was also small. The answer was long.

Next question comes from [ Milan Malhotra ], an individual investor.

I have a couple of questions. First one being obviously, Metaverse, you talked about it already, but I just wanted to know a bit more on that, like how big is this opportunity? And how close we are to Metaverse, like has they talk about it? Like technology-wise, are we there? Or we are -- still we are far from it? It's just that the -- it's flavor of the discussion, but still technology is far from happening. And if it is close, then how large it can turn out to be for the adtech industry as a whole and for us? And how are we aligning ourselves to capitalize on it as we have always been ahead of curve, made the programmatic advertising or video? So are we, in fact, even considering any strategic move on that front? And in connection to that, whether MediaMint's AR/VR section is capable of, technology-wise, like to give us an initial push in that direction?

Okay. Yes. I think that question I answered partly, I'll try to get in deeper. So you'll have to bear with me because this is a -- going to be a slightly larger answer. We have kind of looked at it at a deeper level. So let's do a step back and see what exactly is a Metaverse, right? Metaverse is, yes, like textbook definition, is a parallel universe in a digital world where you have your avatars, go in and do things. Fine. Okay. That has been there for a long time. Who was one of the earliest guys to do it? A company, a player called Second Life, way back almost now, I think, 8, 10 years ago. And that has been there, but it never really -- the takeoff point has not been there till last year, till recently. Now let me give you like pull back and think about it. The deeper essence of a metaverse is -- it is an immersive experience. You have to bear with me here. Let's say you're watching a show, say, House of Cards or one of those, let's say, on Netflix. And then you think, okay, I'm going to watch 1 episode and I'll be done. You're watching, watching and then you suddenly say, "Wow, this is cool. Let me go keep click and keep watching, and you do this binge watching for next 7 hours." You don't even know that there is an outside universe. You've gone totally into your -- into the Netflix world, into that world of House of Cards or whatever show you are watching. Now, just imagine if you're also part of it inside, you're already inside mentally. Now if you can be one of the players in that, that is metaverse, nothing else. So it's an immersive experience that especially -- and again, I keep coming back to people staying home, working from home and being careful not going out and mingling with people have pushed this direction more. So people have started to spend more time. And the social media giants are seeing this as a massive opportunity to keep them there longer. So they may come up with -- there are lot of universes right now, I can tell you a few names on top of my head, something like Activeworld, Anyland, Engage, SEEK, there's a whole slew of them that are there. So just putting together -- the technology of putting together a metaverse or AR/VR, there are lot of alternatives. Now will that experience will be near reality? Will we get there? You might have watched the movie called Matrix, where people actually think they are -- that is real world. So that is where they're trying to take it right now. Can you get to that point? So that is the whole logic, and that's the technology that we don't get into. We are not into rendering in that business. So if I can run an ad today on Facebook, I can run an ad in their metaverse. For me, it makes no difference. There is no major upgrade in terms of technology, I just have to strategically align on what to sell, how to sell, where all to play. So the whole placement becomes not just one banner, I can go into somebody's world and start watching this guy, what he's trying to do, he's driving to various places, he's going to restaurants. Can I have an audio ad there? Can I have a music ad here? Can I have something? So these are some things that can be placed very strategically inside it. So that logic -- and we will continue to stay in the advertising part where we specialize in, how to target, whom to target, which avatar target becomes our next plan. And I can go on and on. This is broadly the way we are thinking. Are we going to use what MediaMint has such -- those -- I mean, those are all at the smaller level, and we are more -- on the strategic level, how can we actually become a significant player. We have to be. There is no choice. So if you have to be a significant advertising player, all the advertising agency, networks today, we'll have to be part of that world as well. If one is spending 6, 7 hours inside it going forward, we don't know what that number is at, number has been thrown around. But -- so it becomes part of their life. See, why you are -- see, in the past, you would see huge hoardings on the roads or TV watching because people watching TV, then they started getting into their laptop or their tablet and watch things or read stuff. The ads went in there. Now this is just another channel. It's an important channel. It's an evolving channel. So relationships are critical, who are the players, who should we sign up, that becomes more a business and then -- a business problem to solve. And technically for us it's a flip of a switch. It is not at all hard. Yes, we'll have to make some changes because of format changes. It is simple for us to go from online to mobile, we never made so much noise about it because it's just a flip of a switch. This is very similar in that sense. But we are watching -- what I mentioned in my last call was, we are watching the development in this world and how we will have to be early in making sure we are part of that changing ecosystem. Does that answer your question, Milan? Sorry, I went on and on.

Yes, definitely. No, no, definitely. Yes, because...

So this is in our mind right now.

Yes, yes. Because if it turns out to be what it claims to be, it can be a very huge opportunity like as you said, people moving from non-digital things to digital gadgets and all. So advertising had to follow the users because they are spending more time on online. So now if users are going to spend more time in metaverse, we -- so, obviously, advertising may also shift and impact...

We have to be part of that system.

Correct.

And what you buy/sell in that world is different. They may buy clothes for their avatar. I don't know what they'll buy. Whatever they buy, we should be there. We should start working and being part of that.

Correct. You answered it pretty well. I do have a couple of questions more. It's about MediaMint, like they have a blue chip clients like Netflix, Disney, Hulu, Pinterest to mention a few. What exactly is it that they do for these clients? Is it just -- is it services, back-end support? Or do they actually run campaigns for them?

They run campaigns for them. They run campaigns for them. See, it's like, for example, Pinterest, I believe Pinterest alone has close to 100 people working in the MediaMint office. So it's something, let's say, they have -- even if they -- it's something that they've built that credibility with these large clients. So there -- it's just an extension of their workplace and these guys are in there, they are setting their campaigns, they understand their inside systems. They are part of that. And they are knowingly or unknowingly specialized a lot in the OTT area, which I think is a great benefit to Brightcom. And those relationships can surely be leverage. We'll take our time. We don't want to go and rock a boat in any means. We give them time where they feel comfortable with the whole company and how we all operate. And we believe it takes 6 months. You cannot just go in and walk in and start changing boards and scaring people. That's not at all the idea. So that's how we want to do it.

Okay. Yes. Are we exploring any other promising markets like for adtech like China or maybe South Korea?

Yes. I can't say anything more than that. Okay?

All right.

At this point, it's too early, yes.

Yes. I mean, I -- there is -- like my questions are done. There's just like a request. We have like so many partnerships with these anti-fraud technology players in the market to provide the clean traffic and all. So can we have a presentation, again, a renewed presentation on that front? A lot of investors have joined in lately. So if a presentation we can have on that front?

Let me see what we can do on that. I'll take -- point taken. I will see what we can do on that. Can we go to the next caller?

Next question comes from [ Sunil Khanna ] from [ Matrix Options ].

Congratulations for the great robust set of Q3 numbers. So I have 3 things to ask. One is with regard to bonus. So, as a stakeholder, all of us are very delighted and happy for the second bonus, which the company has declared. Can you let us share when is the record date? That is one thing. And considering the market cap of the company now, is there any possibility for our company Brightcom to enter into a F&O space? And the third thing is, with regard to overseas listing. By any means is there likely chance of Brightcom listing in Western exchanges? In what way the company and as a shareholder, we get benefited?

Okay. Yes. So I'll try and address that. Thank you, first of all, for coming on the call, and for your question. Yes, with regard to bonus, record date, see, this is -- we cannot decide the record date today. How it works is, after we announce in the Board, right, after the Board meeting, after it is announced, one is given 60 days to finish all formality of completing the bonus. I cannot do anything related to bonus issuance after 60 days. We can do it, then entire thing goes for a toss, you cannot do it. So that is the law. And so, that is number one. So in that period, I have to get shareholder approval, and I have to get in principle approval or approvals from the exchanges. Once these 2 are done, then I have to get set a record date. Then from -- then we have the Board Meeting and set a record date. And then after the record date, what -- whoever is on, on that record date will get a bonus. So there are a lot of questions that are coming. If I buy shares today, will I get bonus? Absolutely, you will get. You will get the bonus since till date of the record date, which is what you're pointing out. So the record date will be after we get the -- after we finish the -- obviously, the shareholder approval and parallelly process the exchange approval. Once these both are done, there will be a Board Meeting, we decide on the record date. The outer limit is surely 60 days. It cannot go beyond 60 days from the Board Meeting on which we announced this. So that is how it works. And I can -- I don't want to give you a record date today, and it doesn't make sense because these -- some of these are not in our hand. Exchanges can take whatever time they take. Once it is done, we will do it. So it's -- I mean, if you want to get a ballpark number, it will be between, I would say, 40 days to 60 days from the date of announcement in that ballpark, right? I mean, it's just logical. I think that's where it is. So then coming to market cap and F&O space, I think it's a natural evolution. There's not much we can do or not do. It's mostly how exchanges work with it. So we are focused on ensuring that we provide the results, focusing on articulating and communicating what we do to the market at large, updating the exchanges, updating stakeholders continuously, talking to fund, talking to larger players. So that is part of what we have to do. So which will hopefully convert into a market cap, which will put us into a market cap that will take us eligible for F&O and such. And it's nothing I can comment on, to be honest right now. So it's -- right now, it's difficult for us to comment on it. We're not opposed to being part of it, or we are not trying to be part of it. It's a natural evolution. So that is given. Overseas listing, we looked at it. We evaluated it I think a couple of years ago. We also, in fact, even tried to do debt financing also overseas through this. But we felt once we have to -- some of the things that we learned from that experience was it's better to go there once your market cap is significant and you're getting the right multiple and your -- some of these things have to fall in place and stay stable for a bit before we start looking at these options. We do keep getting some of these inbound calls, but it's -- we are in not a huge hurry to go quickly in this space. And if we do list, we will not list the parent, we'll list the subsidiary, which is what I was talking to the previous call. Patrick had a question on that. So we will look at either an overseas listing or private equity at that level or a SPAC at that level, there are 100 ways to do that. So that is -- and those tools are available, we are well aware of those tools. But the time has to be right. So we have to be rightly valued. We feel there is still room to get the right valuations and stay stable at certain level, then these options will come. And in terms of what is good for the shareholders as long as your investment is growing, whether it is India or overseas, I don't think as a shareholder, we should worry about it because I'm also a shareholder. We should worry about our share price being rightly valued. That is more important. That is the 3 ways I'm looking at it.

Next question comes from [ Ian Bedan ], an individual investor.

Congratulations on the great numbers. And I've got a couple of questions here. Considering a free cash flow of, say, INR 500 crores for this current financial year and cash flow -- free cash flow of INR 250 crores in the first quarter for next financial year, what would be a number you can throw for the whole -- free cash flow number you can throw for the next financial year?

We will get these guidances out later again. I think we just want to consolidate a few things in February. We'll probably get the numbers out early March. We'll give guidance for next financial year and call the free cash flow projections and such. So correction is INR 250 crores is by March and INR 500 crores is after the first quarter of next financial year. Small correction.

Okay. Thanks for correcting me. And another question would be, we were talking about the line of credit about a year ago, actively talk -- are we still pursuing that line of credit?

We have put that on hold. Yes. Like I just answered that in the -- to the previous caller. Whether it's an overseas listing or line of credit, all this we have put on hold at this point because it -- we just want to go into that space as a stronger entity with the larger market cap and more swag, if you may. So that's what we're trying to [ do ].

Okay. Because what I've observed is, given great numbers we've given this quarter, our receivables have also gone close to INR 2,000 crores.

Correct.

So if you can use this as a -- to raise some money or something, that was the reason for me asking this question.

A good question. Yes, a good question. We are considering that, but I think we'll stall a little more. And I think this will all be collected and that's what -- whether you collect it or you finance it, better you collect, right? So we're trying to see how we can improve collections. And then whatever is left we should start looking at how do we get at that again. So at this point, so we'll probably do that mid-next year.

Thank you, sir. That would be the last question for the day. Ladies and gentlemen, this concludes your conference call for today. Thank you for your participation and for using Door Sabha's conference call service. You may disconnect your lines now. Thank you, and have a pleasant day. Thank you.

Thank you.